Product Liability 2009 - Arnold & Porter LLP

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International Electronic Discovery Carroll, Burdick & McDonough International
6. e-Discovery Vendors: So Who Can We
Count on to Help Us Get Through e-
Discovery?
As the discovery practices evolve with technology and e-Discovery
becomes more prevalent, the effective practice of e-Discovery often
requires the services of an e-Discovery vendor. In the past few years,
the legal community has seen a rapid proliferation of e-Discovery
vendors and service providers that assist counsel and clients in
obtaining and managing electronic data prior to and during litigation.
The vendor works with the client’s counsel and IT staff to ascertain
where documents are stored, in what format they are stored and how
the data can be retrieved in a way that does not change it. In addition,
the vendor generally has access to equipment and personnel that allow
legacy data from dormant e-mail, word processing and other systems
to be read and retrieved. Vendors convert the data into a format that
allows attorneys to review and produce it. Many vendors and service
providers often provide additional consulting services and even assist
in selecting search terms or perform the first review and filtering of
documents. Often an e-Discovery vendor is essential to properly
assess and budget, harvest, filter and format ESI for production.
The production of electronic documents and data is now part of the US
litigation culture. Cost-effective managing of the harvesting, review
and production of such information requires careful selection of e-
Discovery vendors. Failure to do so can lead to costly and timeconsuming
conflicts between lawyer and client.
In the recent past, marquee law firms, vendors and clients have
become embroiled in public finger-pointing and even litigation
regarding the services rendered. Often the allegations include trading
blame for the under- or over-inclusive production of ESI, delays
leading to the inability to comply with court deadlines, and allegations
of overcharging. Technical glitches in e-Discovery software have cost
attorneys, clients and the courts hours of valuable time and thousands
in resources. [See Endnote 10.]
In litigation today, e-Discovery vendors are performing services that
go beyond mere litigation support. External lawyers and clients
ultimately need to keep in mind that they will often be held
responsible for mistakes by third-party vendors.
7. Proportionality & Costs: Shifting & Sharing
the Benefits & Burdens
The burden of preserving, collecting, preparing, reviewing, and
producing electronic documents and data during civil litigation is
clearly immense. Traditionally, discovery rules outside of the US
foresee that the party seeking the discovery bears the cost of
production. In the US, the costs are presumed to fall on the producing
party. The e-Discovery amendments to the US Federal Rules do not
change that regime, but instead rely on a two-tiered approach to the
production of electronic information: Under Rule 26(b)(2)(B) “[a]
party need not provide discovery” of ESI “from sources that the party
identifies as not reasonably accessible because of undue burden or
cost”. The burden is on the producing party to show that it falls into
this category. Otherwise, case law continues to govern cost-shifting in
US e-Discovery.
Increasingly, courts are showing a willingness to pass to the requesting
party the burdensome costs of producing e-Discovery.
In Australia, for example, prior to the 1998 Federal Court judgment by
Justice Sackville in the case BT (Australasia) Pty Ltd v. State of New
South Wales & Anor (No. 9) [1998] 363 FCA, the retrieval and
analysis of electronic files was accepted as being too costly and
challenging a task for Australian litigants to be required to undertake.
In his finding that Telstra failed to comply fully with its electronic data
discovery obligations, the judge scathingly rejected that view.
Justice Sackville stated that “[he] accept[ed] and appreciate[ed] that
the purpose of making and retaining the backup was essentially
disaster recovery, rather than archival. Nonetheless, as subsequent
events have demonstrated, it is feasible, albeit difficult and expensive,
for the tapes to be restored and a review process set in place to identify
discoverable material. The fact is that the tapes do contain much
material that is relevant to the issues in the proceedings, even though
it is technically difficult to retrieve and the task of review is time
consuming”. The message to Australian lawyers was clear: electronic
document discovery may be onerous, costly and time consuming, but
there is no excuse for not doing it. Since that time, e-Discovery in
Australia has become widely accepted, with the Australian Federal
Court Rules now defining document to include any material data or
information stored by mechanical or electronic means. [See Endnote
12.] Clearly, Australian litigants are expected to bear and have borne
significant costs related to e-Discovery and can, as is the case in
traditional discovery, seek a cost order from the court to shift the
burden of producing electronically stored information.
In cost-shifting cases in the US, courts routinely relied on the eight
factor test articulated in Rowe Entertainment, Inc. v. The William
Morris Agency, Inc., 205 FRD 421 (2002), or the seven factor test
from Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003)
(Zubulake III). Courts also sometimes employ the Advisory
Committee Notes to the US Federal Rules e-Discovery amendments.
In Rowe, the court shifted all e-Discovery production costs to the
plaintiff, except the defendants’ search of their own materials for
privileged e-mails, finding that although the plaintiff could not obtain
the information by other means, the plaintiff’s discovery requests were
very broad and the plaintiff had not been able to prove that the
discovery of e-mail would be a “gold mine” of relevant information.
In Rowe, a group of concert promoters had sued several talent
agencies for allegedly freezing them out of the market for promoting
certain events. The plaintiffs had moved to compel the production of
all documents, including e-mail, concerning any communication
between any of the defendants relating to the selection of concert
promoters in the course of its business. The William Morris agency
alone estimated that it would cost approximately US$ 9,750,000 to
fulfil the plaintiffs’ discovery request. In reaching its decision, the
court employed an eight-factor balancing test. [See Endnote 13.]
The test set forth in Zubulake III makes it more difficult to shift costs
to the requesting party than under Rowe. The court in Zubulake III
even criticised the approach set forth in Rowe for making it too easy
to shift costs back to the requesting party, asserting that “there is little
doubt that the Rowe factors will generally favour cost-shifting” and
called the Rowe approach “incomplete”. Zubulake III adopted a threestep
analysis, which incorporated some of Rowe’s eight factors. Step
#1 is to determine whether cost-shifting is even an appropriate
consideration. Step #2 requires a factual showing to support shifting
the cost of production to the requesting party. Specifically, the
responding party must restore and produce a sampling of responsive
documents from the inaccessible media. [See Endnote 14.] The final
step #3 in the Zubulake III analysis takes us to the seven enumerated
factors. [See Endnote 15.]
In addition to courts generally applying the Rowe and Zubulake III
factors to determine accessibility and proportionality, another court
relied on the Advisory Committee’s Notes to Rule 26(b)(2)(B) [see
Endnote 16] to conduct the balancing test and find the database in
question not “reasonably accessible” under the rules. In Best Buy
Stores L.P. v. Developers Diversified Realty Corp., 247 F.R.D. 567 (D.
Minn. 2007), a magistrate judge had ordered the plaintiff to restore and
provide discovery from a database that the plaintiff had created for a
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